After DU to 3.0-4.slh.2-aptosid-686 it appears the alsa devices have been changed.
VLC and **removed** work fine for normal audio output but the HDMI audio output no longer works. VLC and **removed** video works fine as well.

VLC and **removed** audio options for alsa only show the old device "HDA ATI HDMI,(HDMI 0)" for HDMI

Going back to the previous kernel fixes the problem. javascript:emoticon('')
Should I actually remove the old alsa devices as suggested by KDE or should I wait for the repositories to get sorted out? javascript:emoticon('')

Piper: The message about removing the devices popped up when I was in KDE. The pop-up seemed to happen after I tried to launch a multimedia program eg VLC or mplayer2. The devices to be removed were greyed out in System settings/Phonon.
After your dist upgrade were you able get audio through your HDMI connection?

Arwa: I have not made any changes to my audio devices, as evidenced by my HDMI audio still working if I boot the previous kernel

Because of a potential conflict with the open source radeon driver, ATI HDMI devices are disabled in kernel 3.0 (so this was a dist upgrade issue after all)
The solution is to edit /etc/default/grub by adding "radeon.audio=1" to the line: